Funds, Abadi working on bid for Brazil's Oi -sources

SAO PAULO, July 19 (Reuters) - A group of a dozen investors,
most of which are creditors and shareholders of Oi SA
, have contacted investment bank Abadi & Co Global
Markets Inc to help structure a potential takeover bid for the
bankrupt Brazilian phone carrier, two sources directly involved
in the matter said on Tuesday.

According to the sources, who asked for anonymity as the
matter is private, the group seeking control of Oi,
which filed for Brazil's biggest-ever in-court reorganization,
includes investment firms and an undisclosed telecommunications
carrier that would act as Oi's strategic operator.

The investors and New York-based Abadi, which specializes in
restructurings in emerging markets, are discussing the terms of
a bid, including the timing, the sources said. The Oi situation
remains "very fluid" and it was not fully clear yet how a deal
would be structured, the first source said.

Neither source said whether the group would pledge new
money, although the first source noted that Oi does not need
fresh cash in the short term. Abadi, through a press
representative, declined to comment.

The Abadi-advised group is one of the few gearing up for
tough bankruptcy talks with Oi, which succumbed to a heavy debt
burden and mounting competition after years of shareholder
disputes. At 65.4 billion reais ($20 billion), Oi's petition for
creditor protection is fraught with challenges due to a complex
capital structure and wide creditor base, analysts said.

The move comes a few days after the Société Mondiale fund
acquired a 6.6 percent stake in Oi. The fund, led by distressed
debt investor Nelson Tanure, launched a campaign to replace most
of Oi's board - triggering speculation that it could pursue a
takeover bid during Oi's bankruptcy proceedings.

According to the first source, the Abadi-advised group is
considering a negotiation with Tanure as one of the alternatives
to reach a deal. The interests of both investor groups in Oi
"are not necessarily misaligned," said the source.

The group is likely to unveil terms of the takeover proposal
to Oi before shareholders and creditors vote on a reorganization
plan, the same source added. Íntegra Associados, a São
Paulo-based advisory firm specializing in corporate turnarounds,
is also working on the bid, the second source said.
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